Advanced Investment Strategy for Trading Major Currency Pairs

Jan Budík and Lenka Smolíková

Littera Scripta, 2013, vol. 6, issue 1

Abstract: In this paper there is a description of one of the possible approaches to investing in the currency market, which is based on the statistical analysis of price movements of major currency pairs. It is the currency pairs EUR/USD, GBP/USD and USD/JPY which consist of major currencies of the world powers. For the analysis includes no fundamental information such as the rate of unemployment, sales, GDP, inflation, etc., and is thus a purely technical analysis, which is based on the actual price. The proposed investment strategy works with short-term investments, which have an average duration of several hours. The logic used strategy is based on the psychological reaction of investors to the previous trading session and their future expectations. To increase the effectiveness of strategies financial leverage is used. This type of investment requires precise compliance with the rules for risk management. Due to diversification, the proposed strategy is put into more currency pairs and achieves stable growth of capital. Due to the computationally intensive optimization problems genetic algorithms that can effectively deal with this type of task were used. The proposed investment portfolio is applied in the time period January 2010 to January 2012 and has been stable profitably. PokroÄ ilá investiÄ ní strategie pro obchodování hlavních mÄ›nových párů

Keywords: portfolio; currency; optimization; profit; investment strategy; genetic algorithm; portfolio; mÄ›na; optimalizace; zisk; investiÄ ní strategie; genetický algoritmus (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
https://littera-scripta.com/articles/advanced-inve ... rency-pairs-08d9a7e3 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rsg:littra:2013-001

Access Statistics for this article

More articles in Littera Scripta from VSTE
Bibliographic data for series maintained by Robin Kunju Mol Raj ().